Understanding stocks

One more thing: Today's investing environment is completely displaced from financial statements and performance. There is no rhyme or reason on the prices of securities. INVEST AT YOUR OWN RISK.

 

Meteoric growth: Bitcoin keeps beating its own best, shooting past $57,000
The price of the world’s most valued digital asset has surged past $57,000, breaking the previously set record in less than 12 hours. Bitcoin has demonstrated a nearly nine-percent day-by-day increase, according to CoinDesk.
Feb 20, 2021 13:51

 

What a twist! Bitcoin investments bring Tesla more returns than sales of electric vehicles
Investing in bitcoin has already yielded US electric car producer Tesla its first gains of around $1 billion. The figure leaves the company’s profits from selling its electric vehicles (EV) far behind.
Feb 22, 2021 11:03

 

The thing you have to remember that the price of a stock is not an accounting report on the previous quarter, but a collective estimate by the market about what the company will make in the future. Accounting is backward looking, the stock market is forward looking.

As far as reduced sales and increased profits, that can be due to a variety of causes: reduced costs (reducing hours /labor), or replacing inventory at a lower cost. It can be due raising the average margin of goods sold, either by increasing high margin item sales (Doritos), or decreasing sales of no margin items (contract fuel). It can also be due to “special items”, like income from selling property.

 

Nah. If you charge more for goods and services, then that is reflected as an INCREASE in revenue. Revenue is basically sales. More than likely, an increase in net income and profit with a decrease in revenue is due to streamlining expenses and improving efficiencies. Or sales of assets.

 

I do not understand the stock market. My only exposure is my 401k. I put just enough money out of each check to get the full company match. I understand Real Estate. I can see it, touch it, stand on it, stand in it. That is where I invest my money.

 

Just remember.
In today's business world, the rich get richer while the average guy is slowly losing ground.
Bitcoin will crash, sooner or later.

 

I guess I didn’t communicate it the way I should have.
What I meant by the reply is big companies like them and others like say Walmart are continually negotiating for what they pay for a said product.
With that being said if the negotiated price of a widget is five dollars this quarter and sells off the shelf for 10.00 setting aside any other costs of business they would have a profit of five dollars off from the ten dollar sale.
Now if the next quarter they negotiate 2.50 for the widget and it sells for the same shelf price the profit becomes 8.50 for the same 10.00 sale.
So the revenue stays the same but profit goes up.
Same scenario when hauling rates stay the same but fuel prices drop.
Revenue stays the same but profit is up.
Of course also like I stated previously cutting overhead is another great way to keep profit up with revenue remaining the same.

 

Because their net profit margin is way less than 1%. You have to look at the dollars too, not just the percentages. Small dollar changes can easily cause large percentage changes in this situation.

If last year I made a penny and this year I make 3 cents, that’s 300% of last year’s results. Sounds great, but in reality nothing to write home about...

 

Yes but like the saying goes “pennies make dollars “
If you made a penny profit last year on 20,000,000 units you made 200,000.00.
If you make 3 cents profit this year on the same 20,000,000 units now your profit is 600,000.00 which is a substantial gain of profit.
With that being said you can see that a couple of more cents in profit per unit to companies that do billions of dollars a year in business can make huge gains.